On account of reduced demand and uncertain market prospects throughout Europe, Ford has decided to close down its underutilized Genk Plant in Belgium and to cease vehicle production by the end of 2014, which will lead to the loss of 4,300 jobs.
Ford, which is estimated to burn through more than $1billion this year in Europe, said that the move is part of a broader plan to restructure its local operations and help to address overcapacity issues curtailing from a more than 20 percent drop in total industry vehicle demand in Western Europe since 2007.
"New vehicle sales in the region have reached a nearly 20-year low this year and are expected to remain flat or fall further next year," Ford said in a press statement.
Under the Blue Oval's proposed plan, production of the next-generation Mondeo, S-MAX and Galaxy could move to Ford’s plant in Valencia, Spain, while assembly of the C-MAX and Grand C-MAX compact minivans could move from Valencia to Saarlouis, Germany.
“The proposed restructuring of our European manufacturing operations is a fundamental part of our plan to strengthen Ford’s business in Europe and to return to profitable growth,” said Stephen Odell, chairman and CEO, Ford of Europe.
“We understand the impact this potential action would have on our work force in Genk, their families, our suppliers and the local communities. We fully recognise and accept our social responsibilities in this difficult situation and, if the restructuring plan is confirmed, we will ensure that we put in place measures and support to lessen the impact for all employees affected,” Odell said.
The automaker added that it will provide more details of its transformation plan for Europe during an analyst and media call on Thursday, October 25.